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Colfax close to selling air and gas unit to KPS: Reuters
Posted on Monday, 13 May 2019 12:09
Colfax, a US-based valves and welding equipment manufacturer, is discussing a potential disposal of it air and gas handling division to private equity firm KPS Capital Partners for over USD 1.80 billion, Reuters reported.
People familiar with the situation told the news provider that an announcement could be made as soon as this week and the deal would help reduce debt following the company’s recent USD 3.15 billion acquisition of medical device firm DJO Global.
Colfax’s air and gas handling operations provide heavy-duty centrifugal and axial cooling fans, heat exchangers, gas compressors and ventilation control systems to the energy, mining and waste water sectors.
Howden Group, the brand under which the unit operates, was named as a potential target back in November 2018 when the parent company agreed to purchase DJO Global.
It said an auction process is close to starting and the company is aiming for a valuation of around GBP 1.50 billion.
While the insiders believe a contract will be signed in the coming days, they also cautioned that there is a possibility talks will end without a deal.
The sources asked not to be named as the situation is still private, while both Colfax and KPS did not respond to Reuters’ requests for comment.
Shares in the New York-listed vendor closed up slightly to USD 27.04 on 10th May, the last trading day prior to the report, which values the company at USD 3.18 billion.
Founded in 1995, Colfax made its largest ever acquisition of DJO Global to expand into the orthopaedics devices area to focus on high-margin businesses.
Should the sale of its air and gas unit be successful, the group will have operations in the fabrication technology sector and medical devices.
In the three months ended 29th March 2019, Colfax generated net sales of USD 1.01 billion, a 14 per cent increase on USD 880.93 million in the corresponding period of 2018.
Adjusted earnings before interest, taxes and amortisation totalled USD 126.75 million in Q1 2019, compared to USD 90.78 million in Q1 2018.
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